Revised submission procedures for the Voluntary Correction Program (VCP),

Rules for plans subject to section 436 restrictions, and

Changes to safe harbor correction methods and fee structures.

Section 403(b) plan sponsors can now correct failures arising from noncompliance with the form and operational requirements of the 403(b) final regulations and other guidance issued by the IRS. The changes generally permit 403(b) plan sponsors to correct failures affecting their plans in the same manner as a qualified plan with the same failure. A plan sponsor may use the VCP to correct a failure to timely adopt a written 403(b) plan. Plans can correct this failure using new Appendix C and Schedule 2.

As of August 31, 2012, the IRS letter Forwarding Program is no longer available as a search method for locating lost plan participants who are owed additional retirement benefits (see “IRS Stops Forwarding Letters for Missing Participants”). The new procedure revises the reasonable actions that a plan sponsor must take to locate lost plan participants who are owed additional retirement benefits. It provides a limited extension of the self-correction program (SCP) correction period and the VCP 150-day correction period for certain plan sponsors taking action to locate lost participants.

A very limited expansion of correction for section 457(b) plans sponsored by tax-exempt entities was added.

The procedure is generally effective April 1, 2013, but plan sponsors may elect to apply provisions on or after December 31, 2012. Forms will be available soon. For 403(b) plan failures that occurred prior to January 1, 2009, plans must use the definitions in Revenue Procedure 2008-50 to determine which failures may be resolved with the EPCRS.